Even as the luxury car market is set to decline by around 40 per cent this year amid the pandemic, German luxury car maker Audi’s medium- to long-term strategy for India remains intact, and it will continue to launch new models in the country, said a top company official.

“At this point in time, the idea is to come out of this situation (pandemic-induced slowdown) strongly and bring all the products that are due for India. Volume is something which we will start thinking about next year, also to the extent that we are not running after volumes and market shares. What we need is a very strong and sustainable business and we will continue to focus on that. Strong network, digitisation and new products are going to be our focus (areas) this year,” Balbir Singh Dhillon, Head of Audi India, told reporters on the sidelines of the launch of the Audi Q2, its most affordable SUV in India.

Available at a price range of ₹34,99,000 to ₹48,89,000 (ex-showroom), the Q2 is an entry-level model in Audi’s 'Q' range of SUVs. After the bookings for the Audi Q2 was announced 10-12 days back, it has received over 100 bookings, said Dhillon. With the Q2’s launch, the company is looking at attracting first-time buyers in the luxury segment, apart from its existing buyers and luxury car buyers, he said.

In the last 10 months, this is the sixth launch by Audi India, he pointed out.

Talking about its focus on digitisation, he said that 18-20% of Audi India’s lead generation happened through online channels – which eventually converts into purchases – and this is only growing, he said. “In times to come, our investments on the digital side will continue to grow in terms of a percentage of our marketing spends,” he said.

The Audi Q2 is imported to India as a completely built-up unit (CBU), under which 2,500 cars per annum is allowed by the government. Explaining the rationale for the same, Dhillon said that this allows the company to get it without homologation and earlier than it would have been possible had it been locally produced. “As we move on, we will always evaluate whether at a later date we will produce locally because it’s an entry level model and we also anticipate a certain minimum volume in this product. And, this quota, which is available through the government, is only 2,500 cars per annum,” said Dhillon.

The twin obstacles

There are two major issues facing luxury car makers, one being taxation and the other being regulations, said Dhillon.

“The luxury segment still attracts the highest import duties as well as GST rates. We continue to face this and that’s one of the reasons why the luxury industry continues to remain just one per cent of the total automotive industry in India. It has not grown; it has remained like that,” he explained.

As for regulations, like the quality control orders or QCO, the government needs to provide a stable policy regime, which is applicable for a couple of years so that they can get a clear roadmap and plan accordingly, he said. “This start-stop manner (of regulations) is the biggest problem that we face because we normally plan our car launches 3-5 years before. And if something comes up, which is applicable in the next one year or in six months’ time, it is impossible for us to manage,” he added.

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